small business bc retail distribution-09dec2013

Retail Distribution

move your product line to market

Small Business BCGerry Spitzner | retailSOS.ca

December 9, 2013

ThoughtstartersPurchasing methodsDistributionProductPreparationPresentation

retailSOS.ca | Gerry Spitzner 2

Roadmap

Insights for creating, engaging and keeping your retail customer.

An approach to dealing with crazy busy retailers.

Inputs, outputs and outcomes for your business plan and sales/marketing plan.

Answer your questions.


My Goal for you today is...

Why retailers buy How to approach retailers What retail buyers look for in suppliers What retail buyers look for in a product Retail pricing and merchandising Retail distribution and logistics channels Your sales and marketing plan


Learning Objectives

POS = point of sale POP = point of purchase WMS = warehouse mgmt system SKU = stock keeping unit MOM = minimum order multiple CPG = consumer package good


Acronyms

IND = independent retailer UPC = universal product code QR = quick response code PO = purchase order GMROI = Gross Margin Return On Investment

CRM = Customer Relationship Management


Acronyms

EDI = Electronic Data Interchange EFT = Electronic Funds Transfer EDLP = Everyday Low Pricing OTB = Open-to-Buy POG = Plan-o-gram RDA = Retail Display Allowance


Acronyms

Thought startersHow retailers think…


The 4 P’s of marketing◦Product, Price, Place and Position

7 P formula for marketing success◦Promotion, Productivity and “Profit-

unities” How will this product generate incremental sales for me? And repeat.


Thoughtstarters

What’s the difference between your customers and your

consumers ?


Thoughtstarters

Have you ever had buyers remorse?


Thought starters

Show me the value; or I’ll show you the door.

What is value in the 21st century?◦ Value is a function of the bundle of perceived benefits

offered at a given price.◦ Sell the ‘applied’ benefits of the benefit you and your

product offer. Develop your value proposition.◦ Prospective customers should be able to visualize

exactly what value you could bring their organization.


Important insight #1

How to sell or why retailers buy; which do you prefer to learn?

Who are people more likely to believe; themselves or you?

Who is better at closing the sale; your potential retail customer or you?



Why they buyTaking a look at the initial purchasing process from the buyer’s perspective offers invaluable insight to consider in your own selling process.


Profit; make money and/or save time. Want products that turn over at a price that will make them money.

Want to know the repeat purchase potential, and can it be replenished quickly and reliably.

Want products that drive customer traffic to and through the store.


Why they buy

How can I keep my customers in the store longer?◦Increases the average sale per customer

Look at products through the eyes of consumers to meet leading trends◦Increased impulse sales = increased

average sale per customer


Why they buy

How to approach retailers

Do you sometimes wish you could just read your buyer’s mind? Ask; don’t tell. Stop ‘selling’ and help your customers buy.


Top line sales and cash flow Customer traffic Customer profitability Staff productivity Return on investment; ROI


What are retailers thinking about?

Inventory is one of the top two controllable assets in the business.

Do we really need that?◦ does your product fit my current market mix, ◦ do I have the space to merchandise it, ◦ do I have the cash flow (money) to pay for it?◦ What happens if I’m stuck with it?



Inventory is the retail gamble

It’s easy to turn cash into inventory...the challenge is to turn inventory into cash.

Help me move it; and promote it.



Make your presentation in terms of the retailer, your customer.



How they benefit, how they profit, and how they produce will

provide value.



The approach to IND’s and Banners is different than approach to chain...

Chain retailers like to act like small retailers

IND and Banner retailers look for products not in chains



Make yourself irresistible to crazy-busy buyers and

customers...



1. Complexity and information overload brings them to a screeching halt.

2. They subscribe to the “ If it ain’t broke, don’t fix it “ philosophy.


Crazy busy buyers

3. They think making risky decisions is career inhibiting. Especially chain retailers.

4. Most of their options seem like near clones of one another.

5. Not tolerant of stupidity or incompetence in other people.


Crazy busy buyers

Focus on ChallengesShare OutcomesEngage in ConversationSuggest Next Steps


Selling to Crazy Busy People

Keep things simpleDemonstrate strong biz caseMinimize the riskPrepare, prepare, prepare


Selling to Crazy Busy People

What retail buyers look for in suppliers

In addition to mentally preparing for the meeting, here's a list of some of the things a retail buyer may expect to see at your presentation.


What your biz background is Your Financial means Number of years in business Geographical limitations

◦ What area can you physically cover and ship to?

Always remember, while you are qualifying them; they are qualifying you. Know, like, trust.


What buyers look for in suppliers

Do not expect the retail buyer to know everything about the product category.◦Come in with some facts & market research.◦Sales trends in the category, consumer

research.◦Trend watching; help me with what’s hot.◦Tell me about something new or up and coming.◦What’s happening in the marketplace?



You need to know my customers. I do. Do your market research ahead of meeting me then ask me about my market & customers.



I need to know your advertising and promotions plan.

How will you educate my customers about your product and get them to try it?

I don't have these answers for your product; you do. Or you should.



Can you replenish quickly; do you have a solid supply chain?

Speed to market is just as important (if not MORE important) than the shelf price or cost of an item.

Your supply chain to the MFR. becomes part of my supply chain and I care what it is.



Objections and roadblocks◦Objections are signposts that lead you

step-by-step toward closing the sale. Understand your customers situation

◦Help me move product and make money; frame your sale this way.

◦The buyer is dealing with limited shelf space


What sellers ought to do

Shop the store ahead of time. Understand strategic positioning of the store.

Keep things simple; make your presentation short and snappy.

Don’t show everything you have at once. Too many choices confuses the buyer.


What sellers ought to do

The answer is no... ◦If they feel pressure from you◦If they feel like you're trying too hard to be liked◦If they don't think you understand their business◦If they think you’re focused on what’s in it for

you◦If they get overwhelmed by what you're saying


Important Insight #3

What buyers look for in a product What you say and how you deliver your “pitch” will make all the difference...


Where else are you selling this product?◦What makes it sell? ◦What problem does it solve?

I need to know why your product will be wanted by my customers.◦Is there a “market match” to my market?◦What does it ultimately help my customers

achieve?retailSOS.ca | Gerry Spitzner 39

What buyers look for in a product

Is there a need or a market? Or both? A need alone does not = a market; desire does.

Desire is the sweet spot where the market is.



Push or pull product? What is the barrier to entry? Is your product future proof? What is the life cycle of product?



Taste, health, ingredients, appearance, sustainability, preparation, packaging, customer value...etc etc.

All buyers do things for their own reasons, figure out what the buyer wants and then provide it for them.



Must be easily understood by store staff and consumers.

How & Who will educate my customers?

What retail price can I get for this product?



A retailer’s shelf space is their commodity. Add interest and ‘excitement’ to their

stores with new products and value. Will this item make my store more

appealing? Will it add to my average sale per

customer?



The retail pricing approach depends on the product and the buyer.

Some look at product first; ◦then see if they can ‘carry’ the price

Others look at cost first; ◦they are judging what the selling price

would be and if a fit to their market or match in a category.



Pricing and Merchandising

Setting the right price for your products and services requires balancing merchandising, pricing, placement, packaging, and promotion.


Know your competition Do not compromise on your price Know your taxes; PST/GST/Tariffs Wholesaler upcharges Brokers fees Include all your costs


Setting Your Cost for Retail

Mark up & margin. What’s the difference?

All of these terms often get confused in the conversation...◦Gross profit percent; GP%◦Gross profit dollars; GP$◦Gross margin percent; GM%◦Gross margin dollars; GM$


Setting Retail Shelf Prices

Tamper proof packaging Display racks and trays Display packages with a window Off shelf areas for new mix Must fit on shelf in section or category it is going to be merchandised in


How to deal with merchandising

Plan-o-grams & compliance Package size/dimensions Photos UPC code UPC code that stays on package Effective packaging worthy of shelf space


How to deal with merchandising

Retail Distribution & Logistics Channels

Retail distribution channels consist of some combination of producers or manufacturers, agents or brokers, wholesalers or distributors, transportation, importers, and retailers.


Three main supply chain channels...◦What is your cost to ship to your

customer?

Wholesalers Direct Store Delivery; DSD Self Distributors; Chain


Retail logistics channels

Department stores Mass & Big Box Specialty & Discount Catalogue & Internet Grocery & Drug Stores Convenience stores


Retail distribution categories

Within each retail category; 3 types◦Chain ◦Banner stores◦Independent stores

Who exactly is your ideal customer?◦Who is your end consumer? ◦Where and why does he or she buy?


Retail distribution channels

Is the product WMS friendly? Case and product UPC Dealing with concealed damages Case pack; smaller MOM’s? Logistics or transportation charges; how are they determined?


In the Logistics Channel

Consider using a professional agent, broker or wholesaler.◦ When you don’t have your own sales team or

sales is not your strong point .◦ There is a cost; however they have connections

and already established relationships.◦ Some wholesalers have their own sales dept.

that you may be able to “tap into” for representation.


Retail reps

Your Sales & Marketing Plan

A successful marketing plan doesn't have to be complex or lengthy, but should contain enough information to help you establish, direct and coordinate your marketing efforts.


Endure long receivable cycle Provide dating Provide prompt pay discount Payment by credit card Even risk not being paid


Be Prepared to:

Provide a listing allowance Prepay freight; delivery to door Clear up damages and returns Have a plan for recall Sign a vendor agreement


Be Prepared to:

Use a wholesaler or broker that specializes in your product category

Referrals are the way to go Value in a short term incentive Becoming the retailer & go online The use of online business media Carefully consider consignment


Consider

There is a stumbling block...for importers.

Almost all national chain retailers have their own import department.

Why do they need you?


Consider

What now?Now what or what now? …

Your outlook is a matter of your positive attitude and willingness to help.


Confidence is the #1 factor ◦ in determining what, from who and where

retailers buy... Quality is #2, Service is #3 Selection is #4 and Price is #5



How can you?... Help them make money Save them time Make them feel safe Make them feel special


Stepping Stones

Just because you are new, doesn’t mean you are not worth the chance.

Retailers need new mix to create, engage and keep customers.

Increase impulse sales and profit.


Stepping Stones

Decide first if you want to approach IND’s, banner or chain retailers.

Then determine your exact ideal retail customer and method of distribution.


What Now?

Start a sales & marketing plan as a blueprint.

Understand your target market, ideal customer and consumer buying motivators. ◦Retailer (your customer) and end

consumers Who, what, where, how and why?


What Now?

Define your unique value proposition and keep it current.

Focus on benefits not just features.◦Value is the bundle of perceived benefits

offered at a given price.◦Consider the applied benefits of the

benefit.◦Your UVP should include what you bring to

the retailers table. retailSOS.ca | Gerry Spitzner 68

What Now?

Retailers are looking for new products to differentiate their stores...◦They don’t have time to find them;◦They need you to help them find the

products and then help them “move” the inventory...

This is your opportunity!


The Opportunity

Your evaluation is appreciated...

Want a copy of this presentation with my speakers notes?

E-mail me; [email protected]


Thanks!

Follow Twitter: @passion4retail Connect LinkedIn:Gerry Spitzner Web: retailSOS.ca Blog: gerryspitzner.com Email: [email protected] Online Biz Card: gerryspitzner.tel


Find me

Gerry Spitzner is an optimist with a natural "kid-like“ curiosity for improving life and business results. He believes in a bright future and our ability to build it together.

Drawing on 35+ years experience in multi-site retail operations, store ownership and the wholesale supply-chain; Gerry brings the leadership, knowledge and market awareness of business development to retail owners helping them achieve growth objectives. He teaches and inspires them to achieve results by aligning their vision with marketing strategy and operational execution.

Fascinated with a lifelong curiosity for why customers buy and a passion for retail; Gerry guides leaders and organizations to create, engage and keep great customers by delivering the promise of an extraordinary customer experience. He has devoted his life to sharing his thinking with other retail leaders to manage market analysis and build business plans that increase profitability and create competitive advantage with systems to implement.

His company is retailSOS.ca, a Vancouver-based business management consultancy with a suite of business services to support retail owners with branding and marketing their business. With a clear understanding of retailing he uses a solution oriented focus with ideas and alternatives that clients can use to address the changing marketplace issues they face right now. Gerry understands who they are, what they need, and where to find it, helping them market and implement strategy to integrate business activities for optimal growth outcomes through customer experience.


About | retailSOS.ca is about implementation; not just information.

For mfr agents info: http://www.cylex.ca/vancouver/manufacturers%20agents%20representatives.html

For list of mfr agents; Google key words; *manufacturers agents vancouver bc*; or *{food brokers} vancouver bc*

For wholesalers; use Google key words; *wholesale (your product category) vancouver bc*


Resource Links

http://www.cylex.ca/vancouver/manufacturers%20agents%20representatives.html

http://www.cylex.ca/vancouver/manufacturers%20agents%20representatives.html

WalMart Vendor agreement: http://www.walmartstores.com/Suppliers/248.aspx Canadian Tire vendor agreement: http://corp.canadiantire.ca/EN/JoinOurTeam/Suppliers/Pages/Su

pplierRequirements.aspx Target vendor agreement: http://img1.targetimg1.com/wcsstore/marketing/ca/company/i

mages/canada/pdf/Vendor_Online_Agreement.pdf

Home Depot vendor agreement: https://homedepotlink.homedepot.com/en-us/Related%20Docu

ments/Canada%20Supplier%20Terms%20and%20Conditions02-04.pdf


Resource Links

http://www.walmartstores.com/Suppliers/248.aspx

http://corp.canadiantire.ca/EN/JoinOurTeam/Suppliers/Pages/SupplierRequirements.aspx

http://corp.canadiantire.ca/EN/JoinOurTeam/Suppliers/Pages/SupplierRequirements.aspx

http://img1.targetimg1.com/wcsstore/marketing/ca/company/images/canada/pdf/Vendor_Online_Agreement.pdf

http://img1.targetimg1.com/wcsstore/marketing/ca/company/images/canada/pdf/Vendor_Online_Agreement.pdf

https://homedepotlink.homedepot.com/en-us/Related%20Documents/Canada%20Supplier%20Terms%20and%20Conditions02-04.pdf



For QR codes: www.qrstuff.com For bar code info; www.gs1ca.org Retail Pricing & Trade issues

◦ http://www.agf.gov.bc.ca/foodprocessing/documents/retailer/section4.pdf

Retail associations:◦ Retail Council of Canada: www.retailcouncil.org◦ NRF - National Retail Federation; Global retail:◦ http://www.nrf.com/


Resource Links

http://www.qrstuff.com/

http://www.gs1ca.org/

http://www.agf.gov.bc.ca/foodprocessing/documents/retailer/section4.pdf



http://www.retailcouncil.org/

http://www.nrf.com/

Sales & Marketing◦http://www.raintoday.com

Sales help and power questions◦http://www.gitomer.com/salesHelp/Sales-Help.ht

ml Sales help and power questions

◦http://andrewsobel.com/ Sales and personal development

◦http://www.briantracy.com Sales strategy and value propositions

◦http://www.jillkonrath.com/retailSOS.ca | Gerry Spitzner 76

Learning Links

http://www.raintoday.com/

http://www.gitomer.com/salesHelp/Sales-Help.html

http://www.gitomer.com/salesHelp/Sales-Help.html

http://andrewsobel.com/

http://www.briantracy.com/

http://www.jillkonrath.com/

Trends: www.trendhunter.com Trends: www.springwise.com Trends: www.trendwatching.com Pricing and margin definition:

◦http://en.wikipedia.org/wiki/Gross_margin Retail, sales & marketing and small business:◦www.retailwire.com


Learning Links

http://www.trendhunter.com/

http://www.springwise.com/

http://www.trendwatching.com/

http://en.wikipedia.org/wiki/Gross_margin

http://www.retailwire.com/

Little Red Book of Selling or The Sales Bible; by Jeffrey Gitomer◦ www.gitomer.com

Be Different or Be Dead; by Roy Osing◦ www.bedifferentorbedead.com

Unmarketing: by Scott Stratten◦ www.unmarketing.com

Enchantment: by Guy Kawasaki◦ www.guykawasaki.com/enchantment

Any of Gary Vaynerchuk’s books;◦ www.garyvaynerchuk.com/


Books

http://www.gitomer.com/

http://www.bedifferentorbedead.com/

http://www.unmarketing.com/

http://www.guykawasaki.com/enchantment

http://www.garyvaynerchuk.com/

http://www.garyvaynerchuk.com/